Electronics company Ellies told shareholders on Tuesday that its losses for the year ended April 30, have widened by more than 700%.
In a trading update, the company, which makes electrical cables and plugs, said it would report a loss per share of 28.97c for the period, 709% higher than the 3.58c loss seen in 2019.
Ellies said the increase in the loss was mainly caused by a decline in revenue attributable to the Covid-19 lockdown in March and April of about R97.7m, together with a gross profit decrease of R26.4m.
The company, also reported a R51.4m impairment of goodwill and restructuring costs incurred related to the migration of the its Johannesburg warehouse to a third party logistics supplier, amounting to R20.6m.
Additionally, Ellies wrote off obsolete inventory amounting to R49m and impaired its investment properties by R12.3m
Before the lockdown came into effect, Ellies — which also makes security alarms — was already facing tough times. In March, the company was considering cutting a fifth of its workforce, citing financial losses that underlined a slump in the manufacturing sector.
The restructuring, which would affect 183 out of a total 872 jobs, would allow the company to focus on its core business of procurement and sale of electronic products, Ellies said at the time.
Shares in Ellies took an initial 17% dive in afternoon trade on Tuesday but quickly recovered, remaining unchanged for the day at 6c a share, giving the company a R37.21m market value.
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